Question

Advance tax paid by a banking company is shown as _________ in the Balance Sheet.

• A. Advance
• B. Investment
• C. Other assets
• D. Continent liability

Answer 1

Answer: (C)

Other assets

While the tax liability will appear as an expense in the profit and loss account, the provision for income-tax will be shown in the Balance Sheet as a current liability and the Advance Tax of Rs. 3, 50,000 paid will be shown as an advance on the asset side of the balance sheet.